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Infowave - Unaudited Group Results for the six months ended 31 August 2004
INFOWAVE HOLDINGS LIMITED
(Registration number 1998/017276/06
Share code: IFW ISIN ZAE000016440
(`InfoWave` or `the Company`)
UNAUDITED GROUP RESULTS for the six months ended 31 August 2004
Abridged Consolidated Income Statement
6 months 6 months Year
ended ended ended
31 August 31 August 29 February
2004 2003 2004
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Revenue 15 610 15 918 30 353
Profit from operations
(before interest) 3 628 3 918 6 844
Net interest income 267 497 779
Profit before taxation 3 894 4 415 7 623
Taxation (1 512) (1 711) (2 683)
Loss attributable to
associated company (45) - -
Profit attributable to ordinary
shareholders 2 338 2 704 4 940
Headline profit
Profit attributable to ordinary
shareholders 2 338 2 704 4 940
Recovery of write-down
of investments - (42) -
Headline profit 2 338 2 662 4 940
Abridged Consolidated Cash Flow Information
6 months 6 months Year
ended ended ended
31 August 31 August 29 February
2004 2003 2004
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Net cash (outflows)/inflows
from operating activities
Cash from operations 2 798 3 488 6 034
Normal tax paid (1 267) (1 356) (3 090)
Dividend paid (2 745) (2 675) (2 675)
Net cash (outflows)/inflows
from operating activities (1 214) (543) 269
Net cash outflows from
investing activities (274) (546) (775)
Net cash outflows from
purchase of preference shares (3 875) - -
Net cash outflows from
financing activities (288) (57) (169)
Net decrease in cash
resources (5 652) (1 146) (675)
Cash and cash equivalents
at beginning of period 7 825 8 500 8 500
Cash and cash equivalents
at end of period 2 173 7 354 7 825
Group Supplementary Information
6 months 6 months Year
ended ended ended
31 August 31 August 29 February
2004 2003 2004
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Capital expenditure for
the period 274 133 342
Capital expenditure authorised 250 350 446
Operating lease expenses 402 353 816
Abridged Consolidated Balance Sheet
31 August 31 August 29 February
2004 2003 2004
(unaudited) (unaudited) (audited)
R`000 R`000 R`000
Assets
Non-current assets
Fixed and intangible assets 756 1 144 938
Deferred taxation asset 320 332 320
Investments 15 12 12
Current assets
Trade and other receivables 5 768 3 896 3 939
Listed preference shares 3 932 - -
Cash and cash equivalents 2 173 7 354 7 825
11 873 11 250 11 764
Total assets 12 964 12 738 13 034
Equity and liabilities
Capital reserves
Issued share capital 9 9 9
Share premium 50 289 338
Accumulated profit 9 814 7 959 10 221
9 873 8 257 10 568
Current liabilities
Trade and other payables 3 091 4 481 2 466
Total equity and liabilities 12 964 12 738 13 034
Group Statement of Changes in Equity
Accu-
Share Share mulated
capital premium profit Total
R`000 R`000 R`000 R`000
Balance at 28 February 2003
as previously stated 9 283 7 929 8 221
Adjustment on initial
application of AC133 - - 27 27
Balance at 28 February 2003
restated 9 283 7 956 8 248
Net profit for the year - - 4 940 4 940
Shares issued during the year - 55 - 55
Dividend paid - - (2 675) (2 675)
Balance at 29 February 2004 9 338 10 221 10 568
Net profit for the period - - 2 338 2 338
Shares issued during
the period - 134 - 134
Shares repurchased and
cancelled during the period - (422) - (422)
Dividend paid - - (2 745) (2 745)
Balance at 31 August 2004 9 50 9 814 9 873
Statistics
6 months 6 months Year
ended ended ended
31 August 31 August 29 February
2004 2003 2004
(unaudited) (unaudited) (audited)
Revenue (R`000) 15 610 15 918 30 353
Number of ordinary
shares in issue (`000) 90 271 89 225 90 605
Weighted average
ordinary shares in
issue (`000) 91 071 89 225 89 798
Net asset value (R`000) 9 873 8 257 10 568
Net asset value per
ordinary share (cents) 10,94 9,25 11,66
Headline earnings
per ordinary share (cents) 2,59 2,98 5,50
Earnings per
ordinary share (cents) 2,59 3,03 5,50
Return on equity (%) 25,79 24,32 52,50
Return on assets (%) 18,03 21,23 37,70
Liquidity ratio (times) 3,84 2,51 4,71
Solvency ratio (times) 4,19 2,84 5,29
Market price per
share
Close (cents) 33 30 25
High (cents) 41 34 35
Low (cents) 33 24 15
Directors` comment
These results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. These and the accounting policies, have
been consistently applied in comparison to the previous year.
The directors endorse the aims of the King Report on Corporate Governance in
conducting the affairs of the company with integrity and in accordance with the
highest standards of corporate practice. The company is committed to the
principles of openness, integrity and accountability in its dealings with all
its stakeholders.
Report to the shareholders
Results
Trading conditions remained difficult during the period under review.
Despite continued profitability, the company has not delivered on anticipated
growth targets. Revenue for the six months ended 31 August 2004 was 2% lower
than the comparative period. Headline earnings decreased by 14% to R2,3 million.
During the period the company repurchased 1,28 million of its shares in the open
market in terms of the general authority granted by shareholders.
These have been cancelled.
This will assist in the company meeting its near term black empowerment target
of 25% black ownership. Towards the end of the period surplus cash was invested
in listed preference shares. A dividend of three cents per share was paid to
shareholders on 14 June 2004.
Strategy
During the next quarter, the board will be reviewing the company`s strategy with
the aim of improving growth and diversification. The company is considering both
organic and acquisitive growth strategies. The board is confident of its focus
on niche software products which is proving to be successful. The board believes
BEE transformation is essential in protecting the business and making new
avenues for growth available to the company.
BEE
We are making good progress towards all aspects of broad-based Black Economic
Empowerment. The BEE ICT Charter is now in its fourth draft, and we have ensured
that the company`s BEE goals remain aligned with the respective criteria and
principles outlined in the Charter. The process of transforming InfoWave into a
Black owned company, is taking longer than originally anticipated.
We are, however, confident that the outcome will be based on learning from the
experiences of other companies` dealings with transactions of a similar nature.
Board composition
On 1 June 2004, the chairman`s role changed from that of executive capacity to
non-executive. Ralph Collis expressed his ongoing commitment to InfoWave. He
remains a major shareholder of the company as at 31 August 2004. This change is
consistent with the board`s aim to increase the ratio of non-executive directors
to executive directors.
InfoWave is in the process of recruiting a financial director in terms of its
Employment Equity goals.
Outlook
The Board is confident that the implementation of the its revised strategy and
BEE transformation will improve growth and sustainability.
Appreciation
We would like to thank our customers for their ongoing loyalty to InfoWave and
our employees for their dedication to our customers.
On behalf of the board
RP Collis
Non-Executive Chairman
T Dunsdon
Chief Executive Officer
Durban
6 October 2004
Directors
RP Collis (Non-Executive Chairman)
T Dunsdon (Chief Executive Officer)
MCB Lionnet, P Naicker, CL von Pannier
P Aposporis*, Dr AB Ravno*
(*Independent non-executive directors)
NC Swinford-Meyer (Company Secretary)
Registered office
Gleneagles Park, 10 Flanders Drive
Mount Edgecombe, 4300
PO Box 2225
M.E.C.C.
Mount Edgecombe, 4301
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
PO Box 61051
Marshalltown, 2107
Sponsor
Sasfin Corporate Finance
a division of Sasfin Bank Limited
Sasfin Place, North Block
13-15 Scott Street
Waverley, 2090
For a Zulu translation of this text, please refer to our website
www.infowave.co.za
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